Wednesday, 15 October 2014

Today, discussions held with Treasury officials, politicians and academics frequently end with them saying they agree that an annual LVT is a good, sustainable, redistributive, fair and green tax but after the poll tax riots it would take a courageous government to introduce it!

The LLC respond thusly:

This is not a logical response and makes no sense to dismiss a tax that will not only benefit business, workers, the environment and the economy but help to rectify an injustice inflicted on people over centuries.

To describe this as "not a logical response" is an insult to not a logical responses.

The point about the Poll Tax riots was, if you give one million really wealthy households a high profile tax cut of £10,000 each and impose an in-your-face tax (or benefit cut) of £1,000 each on ten million poorer households, you get riots.

So doing the opposite i.e. scrapping the Poll Tax and reinstating Domestic Rates would have led to fewer riots. Keep going in the same direction and replace Domestic Rates with LVT, you'd get zero or a negative number of riots, if there is such a concept.

And the harsh fact is that wealthier people are relatively docile when it comes to tax hikes, especially when it comes to 'national' taxes. There were no 50% or 45% income tax riots. There were no riots when they took away child benefit from the top ten percent of earners. There were no riots when they hiked VAT by 5% or when they hiked National Insurance by 2%.*

So if we scrapped a shedload of bad taxes and replaced them with LVT, does anybody seriously think that Poor Widows will leave their mansions and throw their Zimmer frames through plate glass windows? Will merchant bankers in balaclavas be firebombing the nearest HMRC office or town hall? Will the Dukes of Cadogan and Westminster be looting their nearest Curry's or JD Sports?

And if it comes to it, for each Poor Widow, merchant banker or Duke, there are a hundred thousand people who'd be considerably better off each year, and I doubt that they would come out in sympathy.

* All these tax hikes were bad tax hikes; the Child Benefit cut was a bad benefit cut, that's not the point here.

1)Banks, landlords and the top 1% of households own more land by value than the rest of the 99% put together.

2)Anyone who currently pays more in tax than the rental value of land their property occupies is better off under LVT.

3)That translates as if your gross household income is 7% or more of home(s) value, you are better off under LVT.

4)If anyone who currently pays less in tax than the rental value of land they own, sell up and move abroad, we are all better off. We may loose a tax payer, but we gain more overall by a valuable location being freed up. We all take a collective step up the property ladder.

@MWIt's more subtle than that: he has a real go at channelling land value uplift into paying for infrastructure and does propose imposing council tax on unused land banked plots (but only after five years neglect).However instead of the simplicity of LVT he goes for the more complicated solutions such as garden cities and BIG SCHEMES involving local authorities etc .There are some classic quotes such as p60 "In evidence to this review house builders have been clear that their business model relies on building and selling homes rather than speculating on land"( He then goes on to give details of builders accusing each other of doing just that before coming up with quotes that are diametrically opposed.)There are a couple of beach heads in there.

@PQuite: his whole report is a veryelaborate method of putting land value uplift to public use without the obvious LVT.I used to have connexions with some nutters who ran huge horned gramophones from the modern era that did everything possible to avoid reproducing sound electronically. I had one that used an old fashioned needle, vibrations from which were only amplified acoustically while the turntable was powered by electricity ( the original clockwork had springs that were always breaking).Michael Lyons is using the same kind of perverse set up.